Executive Summary

Q3 2025 delivered mixed results: revenue of $402.1M grew 5.6% y/y but missed Wall Street consensus, while adjusted EPS of $0.54 beat by ~$0.10; management cited two CSS supply interruptions and strong cost control as key drivers of the outcome . Revenue consensus was ~$414.3M* and EPS consensus ~$0.435*, implying a revenue miss and an EPS beat [Values retrieved from S&P Global].
Adjusted EBITDA rose to $78.5M (19.5% margin), up from $61.8M (16.2%) in Q3 2024 and $71.2M (17.1%) in Q2 2025, reflecting improved product mix (neurosurgery and wound reconstruction) and disciplined OpEx management .
FY25 guidance was lowered on revenue to $1.620B–$1.640B (previous $1.655B–$1.680B) with adjusted EPS reiterated at $2.19–$2.24 (prior $2.19–$2.29); Q4 revenue guide $420M–$440M and adjusted EPS $0.79–$0.84 are broadly in line with consensus on EPS and encompass consensus revenue .
Narrative catalysts: accelerated relaunch of PriMatrix and Durepair via dual sourcing (ahead of schedule), continued FDA engagement on quality remediation, and margin expansion program targeting $25–$30M cost-out in 2026; risks include ENT reimbursement pressures, MediHoney recall, and private label softness .

What Went Well and What Went Wrong

What Went Well

Adjusted EPS beat despite top-line pressure: “Adjusted EPS for the quarter was $0.54, exceeding the top end of our guidance range,” supported by improved operational efficiency and cost discipline .
Neurosurgery strength and international rebound: Neurosurgery organic growth +13.3% and international revenue +14.6%, aided by stronger supply and demand; China grew ~24% y/y .
Early relaunch progress and supply resilience: “Relaunched PriMatrix and Durepair ahead of schedule, through dual sourcing supply strategy,” signaling improved supply flexibility .

What Went Wrong

CSS supply interruptions: Two August supply disruptions depressed Q3 revenue below guidance; issues resolved but ramp in Q4 will be slower than previously assumed .
Private label weakness and MediHoney recall: Private label down 12.6% y/y; MediHoney off market during remediation, constraining Tissue Technologies growth .
ENT reimbursement pressures: ENT was flat, with growth in AERA and TruDi offset by sinuplasty balloon reimbursement headwinds and capital timing .

Financial Results

Consolidated Performance vs Prior Periods and Consensus

Metric	Q3 2024	Q2 2025	Q3 2025
Revenue ($USD Millions)	$380.834	$415.605	$402.062
GAAP Diluted EPS ($)	$(0.14)	$(6.31) (goodwill impairment)	$(0.07)
Adjusted Diluted EPS ($)	$0.41	$0.45	$0.54
GAAP Gross Margin (%)	52.6%	50.4%	51.5%
Adjusted Gross Margin (%)	63.0%	60.7%	62.9%
Adjusted EBITDA ($USD Millions)	$61.758	$71.224	$78.453
Adjusted EBITDA Margin (%)	16.2%	17.1%	19.5%
Revenue Consensus ($USD Millions)	—	—	$414.308*
EPS Consensus ($)	—	—	$0.435*
EBITDA Consensus ($USD Millions)	—	—	$68.789*

Note: Consensus estimates for Q3 2025 marked with an asterisk were retrieved from S&P Global. Actuals shown alongside for context [Values retrieved from S&P Global].

Segment Breakdown (Q3 2025 vs Q3 2024)

Segment	Q3 2024 ($USD Millions)	Q3 2025 ($USD Millions)	Reported Growth (%)
Neurosurgery	$175.956	$201.563	14.6%
Instruments	$54.238	$50.151	(7.5)%
ENT	$40.588	$40.869	0.7%
Total Codman Specialty Surgical	$270.782	$292.583	8.1%
Wound Reconstruction & Care	$80.460	$83.988	4.4%
Private Label	$29.592	$25.491	(13.9)%
Total Tissue Technologies	$110.052	$109.479	(0.5)%
Total Reported Revenues	$380.834	$402.062	5.6%

KPIs and Balance Sheet Trajectory

KPI	Q1 2025	Q2 2025	Q3 2025
Cash from Operations ($USD Millions)	$(11.257)	$8.919	$40.907
Free Cash Flow ($USD Millions)	$(40.177)	$(11.227)	$25.751
Net Debt ($USD Millions)	$1,574.431	$1,591.130	$1,566.871
Consolidated Leverage Ratio (x)	4.3x	4.5x	4.3x
Total Liquidity (Cash + ST Inv + Revolver)	~$1.16B	~$1.14B	~$549.8M

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($USD Billions)	FY 2025	$1.655–$1.680	$1.620–$1.640	Lowered
Adjusted EPS ($)	FY 2025	$2.19–$2.29	$2.19–$2.24	Narrowed lower end
Revenue ($USD Millions)	Q4 2025	—	$420–$440	New (below prior internal assumptions)
Adjusted EPS ($)	Q4 2025	—	$0.79–$0.84	New (roughly in line with consensus)*
Gross Margin YoY	FY 2025	Down ~300 bps vs 2024	Down ~260 bps (≈200 bps remediation, ≈60 bps tariffs)	Improved vs prior outlook

Note: Consensus comparisons marked with an asterisk were retrieved from S&P Global [Values retrieved from S&P Global].

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2)	Current Period (Q3)	Trend
Compliance Master Plan & FDA	Q1: 10/14 site assessments completed; increased ship holds ($55–$70M) vs initial $27M; active FDA updates . Q2: completed all site baseline assessments; no new CMP-related ship holds in Q2; refined full-year ship hold to ~$100M .	Continued disciplined remediation; constructive FDA engagement; CMP drives costs and gross margin headwinds but execution improving .	Improving execution; remediation extending into 2026 .
Supply Chain & Dual Sourcing	Q1: Integra Skin yield/ramp expected, control tower established . Q2: highest-ever Integra Skin production; Braintree progress .	Dual-sourced PriMatrix & Durepair relaunched ahead of schedule; two August CSS supply interruptions resolved .	Resilience improving; some near-term variability .
ENT Reimbursement & Acclarent	Q1: ENT contribution; private-label component delays . Q2: ENT below expectations on sinuplasty balloon reimbursement pressures; AERA/TruDi double-digit growth .	ENT flat; reimbursement pressure persists; pediatric AERA registry launched .	Mixed; innovation supports offset.
Tariffs/Macro	Q1: FY25 tariff impact estimated ~$22M (EPS ~$0.22) with mitigation plans .	FY25 gross margin headwind ~60 bps from tariffs; FY25 EPS guide incorporates tariff impacts .	Tariff burden moderating vs initial outlook .
Product Performance	Q1: Integra Skin production recovery; DuraSorb growth . Q2: Integra Skin +~20%; DuraSorb +~10%; CSS neurosurgery strength .	Neurosurgery +13.3% organic; Integra Skin ~+25%; DuraSorb ~+50%; private label down .	Strong in core franchises; private label headwinds continue.
Braintree & SurgiMend	Q1: Braintree on track H1’26; PMAs in progress . Q2: on track; relaunch timeline to be shared .	Braintree production on track for June 2026; SurgiMend relaunch expected Q4 2026 .	On plan.

Management Commentary

“In the third quarter, we continued to see healthy demand across our portfolio. While revenue was impacted by two supply interruptions, we delivered strong profitability and cash flow through disciplined cost management and operational efficiencies.” — Mojdeh Poul, CEO .
“Adjusted EPS for the quarter was $0.54, exceeding the top end of our guidance range… Gross margin for the quarter was 62.9%, down 10 bps versus prior year, reflecting remediation costs and tariffs, mostly offset by favorable product mix.” — Lea Knight, CFO .
“We recently relaunched both PriMatrix and DurePair… almost a year ahead of previously expected timelines. This dual sourcing strategy gives us the opportunity to return these critical products to the physicians and patients who rely on them.” — Mojdeh Poul, CEO .
“We expect the [margin expansion] program to yield $25–$30 million of cost reduction in 2026 through initiatives focused on COGS improvement, third party spend reduction, and operating model efficiencies.” — Lea Knight, CFO .

Q&A Highlights

Q4 guidance below Street: Management cited updated assumptions for ENT/private label demand, remediation timing, and post-interruption supply ramp; supply issues resolved but ramp slower than prior assumptions .
Private label visibility: Weakness concentrated in one partner under competitive pressure; expectations for low- to mid-single digit growth trajectory longer-term .
Gross margin sustainability: Q3 benefited from efficiency in E&O and scrap management and favorable mix; FY25 gross margin down ~260 bps, with remediation (~200 bps) and tariffs (~60 bps) headwinds .
PriMatrix/Durepair revenue potential: Prior performance ~$25–$30M annually; relaunch expected to take time to regain share; positioning for stronger 2026 .
Free cash flow conversion: Q3 FCF conversion 61.9%; management expects strong conversion through year-end and into 2026, aiding deleveraging .

Estimates Context

Q3 2025 actuals vs consensus: Revenue $402.1M vs $414.3M* (miss), Adjusted EPS $0.54 vs $0.435* (beat), EBITDA $78.4M vs $68.8M* (beat) .
Q4 2025 guidance vs consensus: Revenue guide $420–$440M vs $432.9M*; adjusted EPS guide $0.79–$0.84 vs $0.8005* (broadly in line). Company expects organic decline in Q4 (−5.9% to −1.4%) as remediation and supply improvements phase-in .
FY25: Revenue guide $1.620–$1.640B lowered; adjusted EPS $2.19–$2.24 reiteration reflects cost control offsetting tariff and remediation pressures .

Note: Every estimate figure marked with an asterisk (*) was retrieved from S&P Global. Values retrieved from S&P Global.

Key Takeaways for Investors

Q3 narrative: revenue miss but quality of earnings strong; margin improvement and cash generation support multiple stabilization amid operational recovery .
CSS strength, especially Neurosurgery, remains a growth engine; international demand (China +~24%) underscores broader recovery .
Near-term risks: ENT reimbursement headwinds, private label softness, and lingering remediation costs cloud Q4 growth; revenue guide reflects conservatism post-supply interruptions .
Strategic positives: accelerated PriMatrix/Durepair relaunch; Braintree on schedule for SurgiMend in 2026; margin expansion program provides 2026 cost tailwind .
FY25 outlook: Revenue reset with EPS preserved via cost control; FY gross margin decline moderated vs prior view (−260 bps vs −300 bps) as remediation efficiencies emerge .
Balance sheet: FCF inflection and steady leverage (~4.3x) with liquidity now ~$550M post-convert repayment; focus on increasing fixed-rate debt proportion by 2026 .
Trading implications: EPS resilience amidst operational noise could de-risk the story; watch Q4 supply normalization, ENT reimbursement developments, and execution on relaunch recovery for catalysts .

INTEGRA LIFESCIENCES HOLDINGS CORP (IART)·Q3 2025 Earnings Summary